Do you fully understand where your products are coming from? How are your relationships with your manufacturers? And what fallback plans or contractual contingencies do you have in place with your suppliers? There needs to be a fruitful and trusting relationship between you and your supplier for both of you to grow, so today we’re sharing our interview with importing expert Manuel Becvar as he shares his best practices for product importing.
In the Thirteenth episode of Skubana’s E-Commerce Mastery Series where we invite experts of their respected fields to share their best practices for success, our host, Dr. Jeremy Weisz of InspiredInsider.com interviews Manuel Becvar of ImportDojo.
Essential Product Importing Lessons Learned:
Valuable sources and locations to find a supplier
Markets to explore and analyzing the competition as a way of product selecting
Why you shouldn’t worry about Chinese sellers as competitors.
Common Mistakes to avoid when dealing with manufacturers
The importance of establishing contracts and contingency plans
Raw Transcript: Manuel Becvar of ImportDojo
Jeremy: Dr. Jeremy Weisz here. I am founder of inspiredinsider.com where I talk with inspirational entrepreneurs and leaders like the founders of P90X, Baby Einstein, Atari and many more. How they overcome big challenges in life and business. This is part of the Skubana E-Commerce Mastery Series where top sellers and experts teach you what really works to boost your e-commerce business. Skubana is a software platform to manage your entire e-commerce operation. Now, all the way from Thailand we have Manuel Becva. He is the founder of Import Dojo. He has been living and working in China for over 10 years, he travels between China and Thailand, with 17 years in the sourcing business. He has a unique perspective because he has his own brand. He sells to retailers and is a supplier and he has worked with some of the biggest retailers in the world developing, sourcing, and finding new products and these include Wal-Mart. You know, you have heard of these Wal-Mart, Amazon, Lowe’s, Sears, Home Depot and many more and he is the author of the “Import Bible: The complete beginners guide to successful importing from China.” Manuel, how is it going?Manuel: Good, thanks. Thanks for having me on the show.
Jeremy: Yeah.
Manuel: I am excited to be here.
Jeremy: You know, I have to start with, there is so many questions about mistakes to avoid with importing, secrets, common questions but I have to start about, tell me about when you met Arnold Schwarzenegger.
Manuel: It was funny. It was in 2005, I met him at a luncheon. He was Governor of California back then and he was doing a tour across Asia to promote Californian products. So he was during a speech, Jackie Chan was also there, actually. He was helping him on promoting things. And at the end of the luncheon, he passed by our table and I just said in German, “Hey, Arnold big fan here and admiring all of your work and success, you know.” And he looked at me and he said, “Well, you must be pretty successful yourself because you are sitting here at this luncheon with your age.” And so he was really surprised, kind of, to see me and he said, “Keep going and see you at the top, you know?” And I was baffled that he actually said something and I was just 23 back then and that motivated me to go for the stars, you know?
Jeremy: Yeah, when I was doing some research, it said, what he said influenced you to start your own business. So what did you take from his words that motivated you?
Manuel: I don’t know. I was always a big fan because he is Austrian, I am Austrian. So we are kind of proud of him.
Jeremy: You have the same size biceps?
Manuel: Not even close. No, but it just motivated me to become as successful as he is, and I obviously I’m not, but it kind of pushed me and it was such an experience that he actually said something and I know it’s silly but it kind of motivated me and kept me going and made me want to be successful.
Jeremy: Yeah. So with those, I mentioned some of those companies, Wal-Mart, Amazon, Lowe’s, Sears, Home Depot. Early on when you started an import business, what were the biggest mistakes that you made?
Manuel: Biggest personal mistakes that I made was not really working organized and not having checklists, having control mechanisms in place that make you help to, that help you to control your suppliers and keep track of everything. So for example, also doing proper background checks on the supplier, just trusting blindly and I was very young back then. So I definitely a lot of…but the most common mistakes, I think, are just not doing your proper research and not working organized with the suppliers and not following up properly. Not calling them once in a while to check on the status of an order maybe or a sample ,for example.
Jeremy: So, Manuel, what’s the most important items on your checklist today, you have?
Manuel: You mean in my business or…?
Jeremy: Yeah, yeah, like now you obviously have like an actual system in place. What are some of the important things that you missed back then that you get now?
Manuel: Well, I kind of work with a whiteboard these days and I work with Excel files and Word files, to-do lists. Just jot down everything that I need to do during the day or I have, I set myself reminders, constantly. I follow up and I am very strict with…I’m disciplined and I am very strict with my to-do list and also I kind of need to finish them thing by thing on each day before I even let go for the day, so.
Jeremy: So, what about today? What’s on the checklist for today, or on the agenda?
Manuel: When I looked at the list, it’s a couple of things. Promotional emails, I need to prepare a new blog entry for tomorrow. I have a couple of emails that I need to reply. It’s early here, so I just got up. But a long day ahead. Also working on the Canton Fair that is coming up. So I am scheduling a couple of meetings with suppliers and I also have a couple of customers coming over, so working on Canton Fair.
Jeremy: Yeah, tell people, for people who don’t know what the Canton Fair, what is it and then what do you hope to accomplish?
Manuel: The Canton Fair is the Holy Grail of all exhibitions in Asia. It’s basically a twice a year held event where all the suppliers of different product categories come to Guangzhou in South China and exhibit. The phase is about three and a half weeks long and is, I mean the exhibition is about three and a half weeks long and it’s separated into three phases. Each phase has different products. And suppliers can exhibit there and obviously buyers can come and visit and see the samples at the booth and talk to the suppliers directly. Do research and find new suppliers and products, that’s basically it.
Jeremy: So how many years have you have been going to this?
Manuel: Since I arrived, that was 2005. So about 10 years. It’s twice a year. I don’t go every time, twice. Sometimes, I just go to the one in April. Sometimes, I go to October.
Jeremy: So tell me throughout the years, what are some of the big trends you’ve seen and the biggest surprises with either products or materials or what’s going on?
Manuel: At the show itself do you mean?
Jeremy: Yeah.
Manuel: It’s not really that you see trends, big trends or surprises there. The real trends and surprises are at the CES in Las Vegas or at the CeBIT in Germany. There is a couple of electronic shows. For example in Hong Kong also where you really see trends. The Canton Fair is really just like a big bazaar where you can go and find a supplier that you need for a specific product. Actually that is a surprise to most buyers when they first come, they expect a lot of new items and a lot of trends but that is definitely not happening in there. What you can find is common bread and butter products and that’s about it and good suppliers. I am not saying, they are not good suppliers but you won’t find the…
Jeremy: The reputable.
Manuel: Yeah, they are reputable and trustworthy, most of them. It’s just nothing new there, you know, just sourcing.
Jeremy: So how do people, what percentage of the people obviously, I know that, you are kind of a thought leader in the space with the Import Bible and you have students. What percentage of your students, do you tell them, “You need to get here, you need to come to this live and in person”?
Manuel: The ones that are advanced, that for example, have like two or three products running already, we are talking Amazon or even if they are small import already and they are selling, let’s say, successfully for a couple of months and they may be stuck with their existing supplier or they’re just tired of looking only online. People in general who are interested to really push the business, get better prices, meet the suppliers directly. I recommend them to come to the fair. But if you are just starting out maybe and you have an existing supplier, everything is running smoothly and you need to focus on your Amazon listing or improve sales or push, boost the sales, then you probably should still stay at home and try to do it from back home online.
Jeremy: Yeah, yeah. Manuel, I want to talk about, you know, about working with the big brands and what you did and what your most valuable lessons from either Wal-Mart, Amazon, Lowe’s. What were some of the notable stories you remember when working with those companies?
Manuel: The big companies try to squeeze out every cent of suppliers. It’s not very easy working with the big retailers. First of all, it’s a very long process so you can expect at least a year with the very big companies before they even place an order. I mostly worked with German companies in my previous job before I started my own company but before that I was working in sales and we were catering different markets, for example US, South America, Western Europe, Northern Europe and like some of those clients were the big ones like Wal-Mart, [inaudible 00:10:51], Target, Amazon and it’s just first of all, it’s very difficult to get in touch with them. Let’s say, my goal back then, not my goal my…
Jeremy: Like, agenda.
Manuel: Yeah, no the my, can we cut out things later from the…?
Jeremy: I just go unedited.
Manuel: Okay. Now my job back then, you know, my job descriptions were sales, cold calling, finding new clients in the new markets that the company wasn’t working in yet. And big companies, they have like daily phone calls or emails from suppliers who want to work with them. So they are very arrogant, first of all, and it’s difficult to get in, that’s for sure. So you meet them through an exhibition or you get referenced by another client of yours or things like that. But the most valuable thing I learned from working with retailers is to be disciplined actually and to follow up properly with suppliers. Because they have so many regulations and so many requirements that suppliers need to meet like certifications, test reports, inspections. You need to follow a line of processes that would be unimaginable for an Amazon seller, you know? An Amazon seller just finds a product online or he sees it in China, he places an order and that’s it. Always in the time span of maybe 30 to 40 days and there is just a lot of preparations and talks and meetings and sample sending and negotiations with suppliers when you work with retailers.
Jeremy: So, Manuel, obviously you have been doing this for 17 years and you kind of give back and teach people. Who are some of your mentors and what were the big lessons they taught you along the way?
Manuel: Along the way. I am not sure, I really have a mentor per se.
Jeremy: I mean, were there people within the importing companies you worked for that kind of, was there anyone that kind of took you under their wing or was it just trial by fire and you just learned by making mistakes?
Manuel: It was more or less, learning by doing from the beginning. I mean, I was lucky that each supervisor or each boss that I had took me under his wing and I learned a lot from each one of them. From one person, I learned a lot of sales then in the other company I worked for, I learned a lot about manufacturing processes itself, you know? Like metal stamping, designing, engineering and so on. And then the last boss was, he was not the best boss but he was very dedicated to his products and he also backed me up a lot when I made a mistake or he taught me a lot of lessons to be dedicated to your products. To focus on your clients and not ever trust suppliers, I guess, that’s key.
Jeremy: For being very thorough. It goes back to your checklist to just make sure that you are very thorough in following up.
Manuel: Yeah. Okay, yeah.
Jeremy: So what are the most common mistakes you see, the people you help, what are they making when they start importing?
Manuel: I think, it’s not having agreements in place when you place an order with a supplier and you don’t do your background check. I mean, I personally go to every factory.
Jeremy: You have the luxury to be, like, in China, yeah?
Manuel: Yeah, it’s true but I realize that not everyone can do that but I would never place an order online to a supplier that I don’t even know, you know? Of course, I will, if I can’t go visit him, I probably have him send me company presentations, I want to see at least the clients that he works with. I’d probably send an inspector to the factory before I place an order. I’m not sending inspectors to every factory. I don’t go to every factory before I place an order. Just before I really place an order, I need to be absolutely sure through thorough background checks and having either visited or sending an inspector there or I am absolutely sure because they got a lot of references from other clients, something like that. So when you’re ordering online, from overseas the biggest mistakes I think are not doing thorough background check, you know, a lot of people just buy through Alibaba and they think because a supplier has three year gold membership, it’s safe to buy with them. It’s not, you know? You can simply buy this membership with Alibaba, so.
Jeremy: Right.
Manuel: Do your background checks on suppliers and be thorough.
Jeremy: What agreements should people have in place?
Manuel: I usually have a buying agreement. It’s like a Word file, a couple of pages. I don’t do with every supplier that he has to sign it. It’s got a couple of terms in there like what happens if there is late shipment or if there is any damage to the products during the transport, so…
Jeremy: Right. You are protected.
Manuel: I have them. Yeah, yeah, I am sort of protected but nothing happened so far but…
Jeremy: Knock on wood.
Manuel: But sort of protected there. But I don’t do that with every factory. For example, if I only have a small order, 200, 300, 400, 500 pieces and the total order amount is even below the $2,000, I probably just make sure that everything is very clear in the email that I give him bullet points what happens if there is late shipment. I tells him probably that there will be inspection that I pay for but if there is any mistake in the order, he has to pay for it and so on and so, yeah. Just listed in the email when you send the supplier the order.
Jeremy: Yeah, and you know Manuel, I was reading one of your posts and what’s interesting what you do is you make improvements to current products that the suppliers have. You know, whether it’s design or function and a question that comes to mind is so how do you keep them from rolling out and copying the improvements? Because, “Oh yeah, Manuel, this is great. Let’s just roll this out to the customers and sell it.” So how do you handle copies or patents or things like that? How should people navigate that?
Manuel: It’s difficult. Obviously, hopefully the supplier will never use your packaging, for example. For my brand, Mandarin-Gear, I have my own packaging and I trust that the supplier will not use my packaging, that is one point. Mostly, they can’t anyway because they don’t have the file to edit it, that’s on my site. In terms of design, it’s the supplier’s design. Like you said, I will just take their design and change maybe the outlook, for example. I have this tablet here. When I first saw it, it was shiny plastic. Sound was like really bad, it was like, two watt or something like that and the battery was only lasting, for two hours. I mean, it was cheap. I took the product. I changed the finishing into the rubber finishing that it’s now. I increased the lifetime of the battery and, yeah, I have my own packaging obviously and I increased the power of the speaker. So I had a certain quantity that I need to meet to actually make those changes but it’s not so much higher than the original MLQ from the supplier. So I trust that, if they want to sell it under the same conditions to other customers, I guess they also need higher quantities and that’s not really how you protect. I do have non-disclosure agreements in place with my suppliers and at least with those products. And you know if it happens, it happens. I mean, I can’t be, I shouldn’t be too grumpy or too upset about it, you know? If it happens, it happens and it just means I’m successful and they want to copy me.
Jeremy: Right. How hard is it to change those things? Like is it just a matter of telling them, I want the battery life to be seven hours or do you have to actually give them some actual research of what they need to do?
Manuel: Well, if it’s very obvious that it needs to be improved and they probably maybe selling it only in the domestic market but they never sold online. Actually, they only sold, for example, within China. A lot of suppliers actually welcome customers suggestions, like, how to improve the products so that they can sell it to other customers so as they don’t sell it.
Jeremy: So they know what to do. If you say, “I want the battery life to be seven hours, I want the volume to be higher.” They can just do that with you telling them.
Manuel: They do that. They know that and if they don’t, move on, you know? Find a new supplier because that it means, it’s either a pure trading company, they don’t have any engineers or they don’t have the means to improve the product or they are not willing, you know? And if they are not even willing at the first few stages of discussing and order to improve the product and how is the relationship going to be when you work with them actually, you know? And so move on, find a new supplier.
Jeremy: Yeah. You know what? You said something really interesting which I never thought about which, is if you’re dealing with a factory, a manufacturer, to send an inspector there. Because I think people, that makes sense actually for people even doing business in the US, you can’t just hop on a plane all the time. If you are across…one’s in New York and the office is in California. What do you tell the inspector to look for and what kind of person, if someone wants to find an inspector, what do you look up to have someone go to the facility?
Manuel: Well, basically, I work a lot with Asian Inspection and you can book everything online. They give, it’s a very clear process, I think. I go through it also on my blog. And you can tell them, for example, if I know that the product has problems maybe on the packaging because it’s very thin or the supplier has told me there is some issue or maybe I read a bad review on Amazon about what is not good about the product, you know? Then I probably tell the inspector, I mean, I will tell him right away that these points are the ones he has to focus on. But on the other hand when they send an inspector, they actually always use someone who is specialized in that category. So for example, if you have a production of t-shirts, the inspection company is not going to send one who is very experience in electronics. They will send one that is experienced in textiles.
Jeremy: Yeah, that makes sense. And then I don’t know if you find this, is there the same type of service in the US or is it just more like an Asian Inspection?
Manuel: You mean, from that particular company or…?
Jeremy: Yeah, from that company or like someone if someone is looking for the same thing for US manufacturers.
Manuel: I think Asian Inspection does a lot within Asia like Turkey, Vietnam, Cambodia, China and so on. I don’t know any company in the US, to be honest. I am pretty sure there are some.
Jeremy: You are the Import Dojo, so you don’t have to. You mentioned some common mistakes, you know, background check, agreements, getting that inspected. What else, what other mistakes do you see people making?
Manuel: Payments. For example, they don’t agree on payment terms, like, just they accept suppliers payment terms just blindly, for example 100% up front or they let them talk them into Western Union payments or they don’t check, for example, bank account details. Let’s say, if I receive an invoice from a supplier and the bank information doesn’t make sense at all with any information that’s relating to the company. For example, if the company’s name is Nimbo Shenfung and then on the banking information, it says Cayman Islands, Greg, something, you know? Then obviously, people don’t think. They just blindly transfer money across the globe, so that’s a big mistake, a lot of people do.
Jeremy: Have you seen that happen where someone basically…is that like a fraudulent, they just get taken?
Manuel: Yeah, I read a lot about that on the Facebook groups. Personally, I don’t know anyone that it has happened to. But I think I read it, like, once or twice a month at least on the Facebook groups and surprises me. I mean, you don’t do that when you…even in the US, you don’t transfer money to someone without checking references, I guess.
Jeremy: What’s typical as far as terms? Because someone manufacturing facility could say one thing and, you know, the person at the back of his mind could be wondering is this normal, is it not normal? What’s typical as far as that goes?
Manuel: Typical within the retail industry LC payments, letter of credit, or TT transfer like 30% down payment, 70% after shipment or upon statement or even before shipment. But it’s also widely used is the documents against payment. So basically the supplier has to fund all the money for the raw material and production and then you pay him upon shipment or upon presentation of documents. But it’s not going to happen online or with suppliers that you find on Alibaba, this usually only happens when you work with a supplier for a long time and so you’ve done business with them in the amount of $50,000 to $100,000 something like that.
Jeremy: So Manuel, go ahead, what’s typical?
Manuel: Yeah, typical payments online is, I guess PayPal. Everyone is trying to use PayPal but it’s not typical in the retail industry at all.
Jeremy: Yeah, yeah. What’s the biggest nightmare you have experienced?
Manuel: The biggest nightmare I have experienced. A supplier once sent out a shipment without me having released it and he sent it to the harbor and he was telling us, me and the buyer, that it’s about to be shipped and we should make the payment and release the documents also. And I didn’t agree with it because the production had some issues and the buyer convinced me, tried to convince me that goods have to be sent back to the factory and has to be reworked. And the supplier wouldn’t agree to do that and the goods were at the harbor and they were charging us day by day for port fees and I think after two weeks, the supplier wouldn’t budge and the buyer eventually agreed. So he had to pay the fees and also accept faulty products and needless to say, he never worked with me again. But I didn’t either with the supplier so.
Jeremy: Yeah. You were stuck in the middle there.
Manuel: Yeah, sometimes, even though you follow all your processes and make sure everything goes right, sometimes things go wrong. You can’t do anything and you just try to do the best you can to have a positive outcome for the buyer, even if it’s not sometimes you end up losing.
Jeremy: Yeah. Manuel, what are the most common questions that you get from e-commerce sellers that are already selling?
Manuel: How to find the perfect product and…
Jeremy: That’s the Holy Grail, right?
Manuel: That’s the most asked question I get and another question I get is, how do you vet suppliers? For example, I have a video on my blog about Alibaba where I give a lot of examples how you can verify a supplier. So I point people to that video and in general read my book.
Jeremy: Yeah, I watched that video, yeah.
Manuel: Okay. Sometimes I feel that people, they don’t take their time to build the business. They hear on a podcast or on a Facebook group, oh I made, $30,000 this month, you know? And they want to duplicate that person’s success overnight and they are not willing to invest the time to read books, to go onto groups, to learn. So I just, I mean I wrote a 70 page book, that’s out there for free and it covers everything so mostly, I just tell people, “Please read the book or do more research,” and yeah.
Jeremy: People want the shortcut.
Manuel: They want the shortcut and there is no get rich quick scheme in this industry, so you got to learn.
Jeremy: So on that, Manuel, so what resources do you recommend? Obviously the Import Bible, you know, you have that free, I mean, there is other blog posts that you put out there. What other resources out there should people be looking at to get the information to start to build their business?
Manuel: There is a couple of other blogs from other people, for example “Ryan’s FBA Journey”, and then of course, there is the “The Amazing Seller.” He covers a lots on the FBA process. And he has got some good resources. I think, over 100 episodes right now. And then, for example, Global Sources has an educational blog that’s called Chinasmartsourcing.com or smartChinasourcing.com. Anyway it’s on global sources. It’s an entire page full of tutorials, videos, PDFs…
Jeremy: You are on their website also.
Manuel: Yes, I recently started blogging for them also they are taking my posts and reblog. What else? If you Google how to import from China, for example, there is…
Jeremy: Then your book will come up, that’s all that comes up.
Manuel: Yeah, it’s page two, I think. But there is also online courses. I mean, obviously, I have a course but there is other people who have equally good material.
Jeremy: What advice do you give to people about the perfect product? You said that is most common question people ask?
Manuel: There is no perfect product, I think. You just pick a product and you go for it. Of course, you should analyze numbers and stuff.
Jeremy: Yeah. I mean, what are people expecting when you say that, I mean, when they ask that? Are they beginners, are they people who have been doing it for a while? Who is asking that?
Manuel: I guess people who are stuck maybe with analysis paralysis and people who just started maybe and they don’t want to do the work. They just, I mean, it’s okay to ask for help but everyone has to decide for his own product. That is why also, I mean for example, I offer sourcing service but I only help on finding suppliers. Everyone needs to find his own product because I don’t want to be held responsible if it tanks, you know? If I source it for him and he purchases it and then it doesn’t work out, I mean.
Jeremy: So basically, they say, “I want to do this, iPhone charger,” and you will source it for them?
Manuel: Yeah, I do that. I mean, first of all, I will tell him, “Don’t do that product.” I do give advice on which products are good and which are not because…
Jeremy: Right. So which are horrible that people should not do?
Manuel: Too much competition, for example, if you take smart phone accessory like a treble charger or an iPhone charger, you know? First of all you need to make sure that the iPhone charger has certification otherwise when you sell it and the Apple products actually tell you when you, for example, you want to charge iPhone with a very cheap charger and iPhone, I think pops up and says, “This is not a original,” I don’t remember the exact pop up, but it says, “This software will not be compatible.” So that’s because the supplier doesn’t have certification and they are not allowed to sell Apple products.
Jeremy: Yeah.
Manuel: So that’s the first thing I will tell them and I would probably give advice and say, “Okay, look there is a lot of competition or it needs certain certification and…”
Jeremy: So what are some of the products you steer people away from?
Manuel: If they’re starting off, you know, maybe anything related to drugs, like medical products or supplementary products, dietary products, baby products like baby accessory, like, I don’t know, baby bottles something like that or…?
Jeremy: Why you tell them to steer away from it?
Manuel: It’s highly regulated in the US, you know, the product is not allowed to contain any chemicals that could cause skin irritation on a baby. It’s to have FDA certification. So these are very highly sensitive products. I would advise them to stay away. Very easy products could be household items, sometimes textiles, decorative items like seasonal products for Christmas, you know, just some decorative items. Those are simple and easy products for gardening or lawn and gardening products. Some tools could be easy products, yeah. Health and medicine, difficult and they’re also ungated because…
Jeremy: Because of regulatory, is that why you tell people to steer away from them?
Manuel: Yeah. And I want them to learn the process first and not dive into the most difficult categories right away. Yeah.
Jeremy: So what trends, since you do a little bit of everything sourcing to, what trends should people be looking into as far as categories go for…? Obviously there is no perfect product but maybe there is like a, you are seeing an upward trend of a particular category that people should look into?
Manuel: I mean, electronics are coming more and more, you know? And you don’t see trends within the household industry, you see trends in consumer electronics or…I mean, what I suggest is go look onto Kickstarter and look most trending products and you will see which categories are most trending and it’s usually electronics. So look into electronics. I know that a lot of people say, stay away from electronics but if you follow regulations, if you have certifications from suppliers, go for it because the margins are one of the best out there. I sell electronics and I don’t have a problem. I mean…
Jeremy: Talk about that for a second, Manuel. So Mandarin-Gear, what was your first product?
Manuel: I didn’t really create any product, like I said, I took existing items and then I improved them, put them into packaging and sell them to retailers. But my first product that I sold was a Bluetooth speaker, yeah, a Bluetooth speaker.
Jeremy: And what made you decide to do that? Tell me the thought process.
Manuel: Well, I was handling this product category in my last job, before I started my own company, and I saw this item at a supplier when I was still working for them. And, you know, I kept having the thought of starting my own company and I took this item and introduced it to a buyer and I said, “Would you be interested in this item?” And he said, “Yeah, sure.” He actually wanted to purchase it and then I think, within a couple of weeks, I quit my job and started my own company and that buyer was actually my first client. It was a retailer, I didn’t sell it on Amazon, I sold it in the retail. And yeah, I guess that product, that Bluetooth speaker helped me to start my own company also.
Jeremy: So I don’t know if you could talk about it or not, but was kind of order does a retailer make for something like that off the bat?
Manuel: That particular items was 2000 pieces. I think, I made a profit of $2.50 each. So that was $5000 US.
Jeremy: It’s a good start.
Manuel: That’s a good start. It was not my biggest profit but it was a good start, yeah.
Jeremy: So what do you do from there? You know retail obviously, I find that most people are not doing that, they are going direct to consumers. So what are some things people should know about going to retail that you did and, you know, with that how did you start to branch off from besides that retailer to other retailers?
Manuel: Well, I collected a lot of contacts in the last 10 years in Asia and I kind of come from the retail industry because when I was back in Austria, I was working in retail. So I kind of knew who the big guys were and I think, before when I really started my own company, I just systematically went through the list of contacts that I have and then I just blindly emailed, fired out emails to everyone that I knew. And obviously I prepared my own PDF catalogue. I had nice photos, I had good promotional texts for my emails and so it was not day one, I am starting and now I am emailing customers. I was preparing a lot in terms of material and, you know, once you send the email, you call them. A couple of days later you call, even if it’s a cold call and you don’t really know them. You know, you just need to follow up and be persuasive with them.
Jeremy: Yeah. I mean is there a particular, let’s say someone is doing it in the US, is there a particular job title that people should because like you said, the companies are so big, who do you even reach out to? Is there a particular, oh, it’s the manager of product development or is there a common job title people should be looking at?
Manuel: Well in Europe, most of them are called, it’s different sometimes. Most of them are called either buyer or head buyer or head of purchasing or product manager, electronic division or purchasing manager. But you may want to approach always the head of a division, like, even if it’s a buying director. If you have his contact, you know, email him and then call him.
Jeremy: Yeah, so Manuel, what was your next product? So you had the Bluetooth speaker. What was next?
Manuel: I built a whole assortment around Bluetooth speakers, smartphone accessory, tablet speakers, what else did I have? Headphones, ear buds, yeah, anything related to Bluetooth really. Anything music because I’m an avid music…I love music, I need it when I work. So anything relating to music really. All in all, it’s 25 products right now in my assortment.
Jeremy: Yeah, what’s the most popular?
Manuel: The most popular is a headset I created. I more or less created this one because it’s quite unique. I can’t say much about it because I am also launching it on Amazon now under my brand and it’s a headphone. It’s good quality, it’s a very competitive price. Sound is good, yeah, one of the most popular.
Jeremy: What is so good…?
Manuel: I sold it already to retail in Europe. It’s just right now launching online.
Jeremy: Yeah. For that, what’s been the one that surprised you that you thought, “This is the product, it’s going to take off.” And then it didn’t as well as you thought.
Manuel: Was also a speaker but it was an existing design in the market and it was going really well. It was more looked like a block but it was twisted. It looked like a candy speaker and I got onto that as well. I changed a bit the color and the packaging but when I got into the market with my client, it was already saturated and, yeah, I more less had to sell it below cost.
Jeremy: What makes you, you know, I find too a lot of people are very private about this stuff. You know, they do not want to tell people their name of their company. They don’t want to tell people what they sell. What makes you so open?
Manuel: Well, for one, the products that I have on my page, Mandarin-Gear, they are all available within the retail market so anyone can buy them. But if I have someone coming and say, “Okay I want to sell it on Amazon,” And I already sell that in retail in Europe, I don’t do that, you know? Because then I destroy my client’s price because anyone can buy it on Amazon now. And other than that I am not very open to what I am selling on Amazon. Actually, I’m not telling anyone. I mean, I do have, now I do have, I can tell you what my first product on Amazon was but that’s about it. I am still selling it. But other than that, I am not so open on my products on Amazon but the ones I sell to retail, anyone can see.
Jeremy: Yeah. So you can talk about the first one you sold on Amazon, which is what the headphones?
Manuel: No, no the first product I sold on Amazon was a stainless steel luggage tag.
Jeremy: Really? That’s random.
Manuel: Yeah. I ordered 500 sets and well, the story goes like this. So I was receiving mail from Emirates and I got my frequent flier card. And I was going, “Oh, that looks like nice,” you know? And they got a luggage tag as well. So you get three cards and one is for the wallet, two is for the luggage with a stainless steel… Yeah, so and I said, “That looks nice, you know, so what about people that do not have frequent flier miles?You know, maybe they want to have a nice tag as well”. And that’s how I came up with the luggage tag, the stainless steel luggage tag. And I think within a few days, I ordered it from the supplier, I ordered 500 pieces and I sold them out really quickly on Amazon.
Jeremy: So why would you talk about that and not the others? And this is pretty common.
Manuel: Because right now, I think, I have like 15 competitors. So be my guest, you know? I have a lot of previews already and I am selling mine and even it does sell, I am not saying I am going to sell it forever. So I am always looking for new products and I am always trying to expand my category into other products.
Jeremy: Yeah. I’m always just curious about the secretive nature that I have, over the past six months, really experienced with people and so I am just always wondering the reason why. And so when you sell on Amazon, are you selling all over the world or do you choose certain countries?
Manuel: No, just .com. So it’s easiest for me also because I am based in Asia. I would be open to selling to, I think UK and Germany are number two and three in terms of sales and customers. I would interested to sell in United States but right now only .com.
Jeremy: Any other platforms you are considering or that you sell on besides Amazon?
Manuel: There are actually a couple in Asia from Rocket Internet is a big German company and it’s called Lazada here, they’re all over Asia, Indonesia and Thailand, Vietnam, Singapore. So I have been thinking of listing there. I’m actually already in the process of talking to them but there is a lot of contracts and, it’s not as easy as Fulfillment by Amazon. And that’s why I love Amazon because it’s so simple for sellers to list up, I mean it’s not simple, we have to follow rules and procedures and so on but it’s the most successful business out there, fulfillment business. The ones in Asia are not so easy, to be honest, but there is a big market out here too, so maybe Asia next so.
Jeremy: Yeah, I ought to send you…I just talked to someone who talked about all the platforms that they are in South Africa and they were talking about places in Russia and that are, you know, talking about some of the trends in the marketplace. So I think, you would like that. And they were talking about the Rocket Internet also. And so what do people like most, what do you find the best feedback either sort of story from Import Bible or a certain lesson that seems to resonate most for people?
Manuel: I think people really like my Alibaba video. The Screencast that I made but also that I outline step by step…when you read my book it’s really where do I start and where does the order end? Obviously then it goes to Amazon and I don’t cover that in a book but every import step, import from China step is in the book. Maybe there is small details in each step but it covers, pretty much, the basics that get everyone started. And just recently I got an email from a work at home mom and she said, she has been thinking about importing a long time already and the book finally gave her the push to do it because it sounds so easy. Always is a difficult process but it can be done and the fact that it covers really the basics, I think that’s what most people like about it.
Jeremy: Yeah. So before talking to you Manuel, I reached out to some people who run e-commerce businesses. I said, “What questions do you have for Manuel, who is an expert in import?” And some of the questions were about Chinese sellers, those are most common questions I get. What are Chinese sellers doing well and…well I’ll start with that. What are the Chinese sellers doing well?
Manuel: Nothing in particular, to be honest, the only thing they are really good at is prices, you know? They have better prices because they’re directly at the source and but I don’t think they do anything particularly good. I had a blog post about, I think, six weeks ago. It’s called, “Don’t worry about [Inaudible 00:50:27].”
Jeremy: I read that.
Manuel: Yeah, and I think, it pretty much outlines why people don’t have to worry yet because Chinese are completely different in their thinking and their culture when it comes to sales. And customer service is not important for them. For us what is really common sense sometimes, they don’t even think about that. I mean, not to be mean or rude or anything, it’s just not within their culture to care about customer service and that’s one thing that they won’t be good at in the near future either. So, the only thing, I think, they are good at is the logistics part and the prices. So maybe they have a bit more profit but in the end, they may have more complaints from customers.
Jeremy: Yeah. So yeah, so the question was that and they said, “Well how do you combat it if they are selling on Amazon?” To me and I said, as you know, Manuel, I do a lot of research. So I said, “I know, exactly how he is going to answer this question there is no point in me asking it because he has a blog post on exactly what you just said.” I said, “I will ask it anyways and I will push back a little bit because he is going to say that’s not their mentality.” They want, because in your blog post, you say, they want the money up front. They don’t want to have to create the products and then sell it, right? And then, I go, “That’s exactly what he is going to say,” and you did. And so we had this back and forth and then they go, “Well, what about, but they can double their money. You know, they can sell at a higher margin, right?” So.
Manuel: Yes, that is true. Well, maybe not double but I think that suppliers make more than 15% to 25%, 30% maybe these days. I mean, obviously, with their own developed products and if it’s a really trendy design then maybe but common trading items are even lower maybe 5% or 6%. So if they are selling, if they are starting to sell a garlic press on Amazon and maybe they had a factory directly, okay? They make maybe 5% or 6% more than the importers who sell that in the US, so that’s not really an advantage. But yeah, I don’t think they have really a big advantage and also they just, I mean, Amazon has been on the ground in China for the last two years, teaching people. Amazon is available in Chinese. So yeah, they’ve been there but it’s still just in the beginning. It’s like China, for example, is slowly moving into higher efficiency manufacturing like Taiwan did 25 years ago. You know, Taiwan is, for example, a high-end manufacturing country. And China is still very, very far away from that. I mean, they’ve got 1.3 people, you need to teach, 1. 3 billion, yeah, or even more so it’s a long process, it takes time and most Amazon sellers are in the business for maybe longer than two years already. So they have a long head start.
Jeremy: I mean, so if, let’s say, a China manufacturer goes head to head with you? You know, they start putting stuff on Amazon, is there anything you can do to combat that or how would a seller better compete?
Manuel: I have a mailing list of 5,000 people so deal with that, supplier. And that’s one of the things that you can really boost your sales in the beginning or to launch a product with a mailing list or Facebook groups. I mean, there is no Facebook in China, there is no Yahoo!, there is no Gmail, there is no CNN, whatever. You know, a lot of sites are blocked in there. So we in the west have a lot of, we have more advantages. We can use tools that Chinese people cannot use. Lots more, I mean, websites. I don’t think Chinese people invest money in building a website around their brand. I mean, when you look at a Chinese factory’s website, it’s horrible English and the photos are really bad quality and we know exactly what to do to attract customers, you know, we Westerners. So I don’t think, it’s a big issue.
Jeremy: Yeah, so many of your students probably sell on various platforms. What do you recommend them when they ask you, “Okay Manuel, I want to increase sales, I want to boost sales.” What do you tell them?
Manuel: Yeah, like I said, having a mailing list helps a lot. Obviously, it takes a long to build a mailing list. Well, you know, go through the usual procedures like send it to friends and family, use the [inaudible 00:55:43] groups, use Facebook groups, even use the paid Amazon seller, the professional Amazon reviewers, you know? There is a couple of people on there that you can approach obviously, you need to give it really for free and but, yeah, get social proof first and then go heavy on PPC. Wait for maybe 15 to 20 to 25 reviews and then switch on PPC and go heavy on the budget, you know? Don’t be shy to spend $50 or obviously more a day on PPC. And, you know, all the while, if you haven’t done it yet, start building Facebook pages or a fan page or start building a mailing list, you know? Try to get your customers’ emails so you can retarget them for your next product.
Jeremy: What are some of the best practices for importing that we didn’t talk about so far, Manuel?
Manuel: Did you read my book? I am just kidding. Best practices, importing. I would say just follow the six steps import process that are lined out in the book and memorize the steps and you are good, I think. I mean, I do cover a lot more for some things on the course that I have, I don’t give everything away for free.
Jeremy: Yeah, so tell me about that actually because you have several services you offer. What do people come to you for? Because obviously, you have the Mandarin-Gear, right, so you sell your own brand. What else? What other services do you have that people should look you up for?
Manuel: Yeah, I have Import Dojo, Import Dojo is a blog where I post every other week. Import Dojo, I have an online course as well that focuses on importing from China. I do cover, I think one-third of the course is about Amazon but only the basics, to be honest. I’m working on an advanced module, right now that I am releasing in November. But two-thirds of the course is about importing from China because I think it’s the most crucial part of the entire business. Because Amazon, I mean, it’s not easy but it’s a clear process on Amazon, you know? And if you follow it, you will be successful. But importing from China can be so many different scenarios and you need to know how to tackle each scenario, and that is what I cover in the course. I also sell my books on Amazon. All four books that I wrote and then I also have my courses on U2ME where on U2ME you only have the course but on Import Dojo I give one-on-one coaching. So I hold people’s hand along the journey. I tell them which categories are good. They can email me with problems that they have with the suppliers. I have Google hangouts with them, so it’s coaching, yeah.
Jeremy: So what about, let’s say, I want to skip everything. I want you one-on-one. I want you to help with sourcing. Do they get your course or is that a separate service, that they can get you for?
Manuel: It’s a separate service. I offer for a flat service package, a flat rate package for sourcing. So say you’re looking for t-shirt, tapestry, whatever in China and you have a link, you have a certain idea of your quantity that you are looking for. I help locating a factory. If I don’t know anyone, I go look but I don’t just use the regular channels like Alibaba or Global Sources, I use my contact mostly.
Jeremy: Yeah. Besides Alibaba, people probably ask you this, what else, what’s the next best source that people should look at online?
Manuel: I would say Global Sources. Global Sources is a very professional, I also did a Screencast recently about them, I’m not sure if you saw. And then there is Taobao, which is the Chinese version of Alibaba but you can work with Google Translate. And you have Epath.com then you have madeinchina.com, ebuy.com and there a couple of others but, you know, the more you look out for the other e-commerce sites, the thinner the field gets in terms of suppliers on the sites. For example, there is Ali Express for drop shipping, so that works well, if you are looking for small quantities and still okay prices but the main two sites Alibaba, Global Sources.
Jeremy: Yeah. What’s been the biggest challenge in the business today?
Manuel: My biggest challenge has been, today?
Jeremy: Yeah, yeah, recently.
Manuel: Coping with capacity. Right now, I am running full steam. For example after this interview, I have the Google Hangout, then I probably have two, three hours of sourcing and then I have emails that I have to take care of then, lots of things. So right now, I am running at full capacity. So I need to expand in terms of sourcing, I need to hire people to help me on the consulting and also, you know, I want to scale my business on Amazon. I want to grow that, so right now I need to hire more people, more employees, more staff.
Jeremy: So what are you going to do to do that?
Manuel: I have been looking already at a couple of people. I am talking to one of my best friends in the coming weeks. He is currently traveling but I already explained him what I had in mind. He also kind of runs his own business. So I kind of, I want to bring him on as a partner and then double the size of staff and…
Jeremy: I ask because, this is stuff people are going through who are watching this, right? They are at capacity. What do they do to grow? And so you kind of mapped out some of those next steps that you need to do.
Manuel: One of my biggest issues in the beginning was I took too much money out of my business, you know? I kind of still live the same lifestyle, I had when I had a monthly paycheck. Going on trips, eating out and so on. So I took money out of my business and that stalled my growth. I was working harder and harder and harder, you know, but I was taking out too much money. So that’s an advice, I would give to people who are starting out. Leave the money inside, maybe start this is a part-time job and leave the money you make on the side. Leave that in the business and reinvest it.
Jeremy: Especially when you are dealing physical goods, like you are. You have to actually pay for the goods. Someone buys your course, it’s a little bit of a different story than you are paying for a 1000 Bluetooth headsets, you know? What do you find has been the toughest about running this type of business?
Manuel: The toughest, I think that you have no one to tell you which direction to go to. I mean previously I always had a supervisor or a boss who hopefully pointed me into a right direction or who gave me ideas for resources or even he had a boss who led the company. But right now, I am my own boss. I am responsible for my own success and I need to constantly look out for new directions where my business can grow or what obstacles I might come across. So, I think that’s difficult because you have no one to tell you what to do.
Jeremy: Yeah. Manuel, so what software do you use to run the business that people should be looking at?
Manuel: Personally, to find new products, I use the old fashioned way. But I do use, for example, Jungle Scout to analyze the numbers. Obviously, I use Microsoft Office everything that you can use like PowerPoint, Excel, Word and I also use Wave app for my accounting.
Jeremy: I don’t know what that is.
Manuel: It’s a US company. It’s called I think wave-apps.com.
Jeremy: How do you spell that?
Manuel: It’s a software, Wave, like the wave.
Jeremy: Oh, wave, Wave app, okay.
Manuel: Wave apps and I use it for my invoicing, accounting, listing products within my system. But other than that, I don’t use any software. I am pretty old fashioned, yeah.
Jeremy: What’s your method for research? Like, let’s say, you hear something. How do you generate new ideas and then how do you actually, what’s your method for researching those?
Manuel: I do mention it’s also couple of times, I use a lot of, I subscribe to a lot of trendy websites like Tech Crunch or what else…?
Jeremy: You were mentioning Kickstarter is one of them.
Manuel: Kickstarter and GetIt and anything that has trendy stuff or I even subscribe to supermarkets or DIY stores, you know? And then they send newsletter every week with the newest products. There you go, you have a free list of products every other week from different kind of categories.
Jeremy: Right, that’s smart.
Manuel: That’s where I get most of my inspiration and also exhibitions help. So I mean, there is also local exhibitions you can go to. What else? Travel a lot, as much as you can. You might see a product that is really popular in the state next to you that could be popular in your state as well. So import it, stuff like this and, yeah, I guess that’s the main way…
Jeremy: Do you find something, let’s say you get your email and you find something. Then what’s your thought process, what’s your method to actually doing the research to see if, yes, I want to pursue this further?
Manuel: Okay. I probably go look on similar websites first. For example, if Engadget send me a review of the really cool gadget or really cool tool that just came out and I probably look on other competitors. For example they say, Sony has just brought out the newest, I don’t know, digital camera. I go onto maybe Panasonic or Phillips or all the other big brands to see if they also carry it. If the competition is small, I try to find the source. If I can’t find the source, I probably have to do more research back at square one. And, you know, once I find the source, I try to get prices and maybe even try to improve the product. Obviously, I don’t improve a Sony digital camera but, you know, get the general idea, maybe add some of your ideas. Brainstorm a little bit, you know, sit down for a couple of minutes and think about could anyone actually use this product, would people buy this product?
Jeremy: Yeah.
Manuel: Stuff like that, yeah.
Jeremy: What about, what’s your opinion on like you mentioned with Kickstarter, there is a lot of technology products. What do you recommend for as far as crowd funding goes? Do you think, it’s good, it’s not good? If your student say, “Manuel, I want to go, why don’t I just have the crowd pay for it ahead of time and then I’ll do it?” What’s your opinion on crowd sourcing sites?
Manuel: I think it’s pretty cool. A friend of mine, just completed a project for glasses that you can use indoors when you sit in front of the computer a lot or when you read a lot on tablets or your smart phone. And he did nearly €300,000 and super successful. And actually, I am also working on a Kickstarter right now with this very same friend. It’s completely out of the industry that I actually work in. Because I saw his success and I was like really motivated to do it myself. But maybe it’s a bit easier for me than for your listeners because I am directly at the source, you know, I can find factories easily. I can go to exhibitions. So yeah, use Kickstarter by all means but make sure that you can find a factory who can actually produce the product and to check if the functionality can be done in the manufacturing process.
Jeremy: So Manuel, since it’s the Skubana E-Commerce Mastery Series, my question, what would you say your lowest moment has been and then on the flip side, what’s been the proudest moment?
Manuel: Good question. The lowest moment has probably happened within timespan of two or three days to best moment. The lowest moment was definitely earlier this year, I had a cancellation of an order from a big retailer and I had to cover a lot of costs with the factory and that cost me quite a couple of thousands and it was like, I was devastated. My whole savings were gone from the previous six to eight months that I was working on and then like a week later, I received the biggest order yet from another retailer in Switzerland. That pretty much cleared off everything again and, yeah, kept me going. So both within the time span of a couple, I think it was within two weeks.
Jeremy: Wow, was it the same product?
Manuel: No, it was a different product. But the first retailer, he just cancelled, you know, and it’s a big retailer and I couldn’t do anything so I was stuck with a lot of debt also with regards to the supplier and then just a couple of days later, I received a really big order with very a nice profit.
Jeremy: That’s a big fear, I think for people going in to retail, if they return it or cancel it.
Manuel: Definitely, yeah. And that’s why you need to have agreements in place. I mean, I did have an agreement in place with that customer but they also have a contract that I needed to sign and there is a lot of clauses in there.
Jeremy: Right, like basically what we sign for you is null and void and this overrides that or something.
Manuel: More or less like that, yeah. So there was no way, I could get my money back. It’s a whole…
Jeremy: So what do you do, just what do you do? You just hustle and sell to another retailer or what do you do in that case?
Manuel: No, that order that I got was also a long time preparation. You know, I was working on that order for a long time. And I was lucky in that case but I guess what you could do was, if you are already in the production process and the customer cancels the order, try to sell it to another client. Hustle, hustle, hustle.
Jeremy: So how did you get that big order, the proudest moment?
Manuel: Actually, it was through one of my contacts and I have been working on that since I started my own company. So it took nearly 11 months to get the order. I was sending a lot of samples. I sent a lot of, I spent hours working on their Excel files that they wanted me to fill out and I had lots of phone calls. I had video conferences. I even drove to Switzerland to meet them. So it was a lot of money and time and work involved definitely.
Jeremy: So what did you do celebrate?
Manuel: I don’t know, I don’t really celebrate orders that much. I mean, I guess just high five to myself. No, I do enjoy the occasional dinner outside with my wife, I exercise a lot so I compensate with sports a lot, fitness I guess.
Jeremy: So, Manuel, this has been hugely valuable. I truly appreciate your time with this and, you know, I have read through your blog post and your YouTube videos. So I suggest people check those out because there is a wealth of information there. And I have one last question before I ask it, where should we send people? Obviously Importdojo.com any other places that we should point people towards?
Manuel: Importdojo.com, I think you’ve got everything you need over there. If you are only interested in reading my books I would be happy to give you the links of my Amazon books also.
Jeremy: I think, they can sign up for the newsletter and get the book, one of the books right?
Manuel: Yeah, sure. The Import Bible is free and I mean, I do sell it on Amazon but you can get it for free on my site. Please don’t tell anyone. But importdojo.com, if people want to learn in general about sourcing or exhibitions in China, go to globalsources.com where you will find a lot of tutorials and free content.
Jeremy: So my last question, Manuel, is what are some of your best business and product ideas that people should steal because you are not going to use them? Because you are just at capacity.
Manuel: Okay. Going to, I think, I have said it before. Going to, what’s it called?
Jeremy: Are you talking about a website or…?
Manuel: No, I am talking about a product…virtual reality. Sorry, virtual reality. Anything with virtual reality, I think, it’s a big deal and I see a lot of suppliers now trying to develop but they have no idea and because there is no, there is no guideline or anywhere from the industry. So that would be an industry, I think is really worth investing your time in. I would love to but I have no time. And other than that, not sure, not sure. Why would I want to give it away? No, but.
Jeremy: Virtual reality. All right.
Manuel: Virtual reality, yeah.
Jeremy: Check out, importdojo.com. Manuel, thank you so much. I really appreciate it.
Manuel: No problem. Thanks a lot for having me. Thank you.
Jeremy: Thanks.
Interview Highlights:
“Biggest personal mistakes that I made was not really working organized and not having checklists, having control mechanisms in place that make you help to, that help you to control your suppliers and keep track of everything. So for example, also doing proper background checks on the supplier, just trusting blindly and I was very young back then. So I definitely a lot of…but the most common mistakes, I think, are just not doing your proper research and not working organized with the suppliers and not following up properly. Not calling them once in a while to check on the status of an order maybe or a sample ,for example.” (00:03:47)
“Y